Profit Analysis Of Public Chemical Industral Companies In A Stock Market Under The Overcapacity Cut Policy Perspective

Since the supply-side reform was proposed by President Xi,the policy of overcapacity cut has been paid more and more attention,as the main regulating method in traditional industry.Not only in steel and coal industries,overcapacity cut has also been implemented in other industries such as chemical,electrolytic aluminum,real estate and even new energy.However,there are academic controversies around overcapacity cut;one of them is the choice of judgement standard of overcapacity-literally,almost all of industries have excessive capacity;Another problem is the actual effect of cutting overcapacity.Based on these backgrounds,the article choose two subdivision areas of chemical industry-soda ash and urea-as research objects,and focus on the overcapacity cut effect in these two areas,providing decision references for policy makers and business strategists.Firstly the article summarizes the domestic and foreign scholars’ researching result of overcapacity,supplying and demanding factors in soda ash and urea industries,and overcapacity cut policies in history,proposing assessment criteria of judgement on overcapacity in chemical industry and evaluation standard of the effect of overcapacity cut,and designing variables in the empirical analysis.Then,the paper examines the influences factors of the chemical products’ factor by the multiple linear regression models,quantifying the relationship between capacity change and industry profitability.Finally the following conclusion was drawn:1.Capacity change is significantly related to the price of soda ash and urea,but its influence degree is inferior to raw material’s prices such as coal.Industry profitability is mostly influenced by the price of rawmaterials.2.The existing domestic overcapacity standard-80 ~ 82%-is not applicable to soda ash and urea industries: the standard is too strict for soda ash industry,while too loose for the urea industry.Thus the implementation of overcapacity cut in these two industries is not effective.3.The problem of overcapacity has been overly emphasized,and the distorted policy execution may exist.